Markets are engaging in a tug-of-war over this week’s inflation data. While Thursday’s cool Producer Price Index (PPI) reading offers some relief from yesterday’s CPI-fueled sell-off, the long-term picture of when the Federal Reserve will feel comfortable enough to cut interest rates has become murkier.
BlackRock Global Chief Investment Strategist Wei Li weighs in on how influential earnings season will be for markets (^DJI, ^IXIC, ^GSPC) and the Fed’s consensus for 2024 rate cuts.
"Off the back of yesterday’s hotter-than-expected CPI print, we think that a June rate cut is perhaps off the table. But this is a Fed that wants to cut rates as we have seen from their rhetoric," Li explains. "We think that the next two inflation prints will be critical in understanding if July is going to be in play because September is cutting it very fine as we get closer to the elections."
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